I was recently being approached by a party which will be granted a takaful license in Malaysia recently. It was a good discussion and exchange of understanding pertaining the takaful matters. During the discussion, they seek for my opinion on how to design their new subsidiary in order to optimize the opportunity in market penetration. It is so common people will pose a question like "How you do things differently?" which we used to read in MBA or management's books.
I told them that do things differently may not necessary deliver better results. Of course, it will generate different results due to different ways of initiatives. Again, it may not necessary deliver better results! Good leader will evaluate the existing strengths and weaknesses of the group and capitalize the strength as much as possible to earn results. For instance, the group already had a good reputation in strong agency force thus that should be the main business strategic objective in the next 5 years. Besides, the partner in shareholding structure is a strong and well known bank which always being awarded with several prestigious awards from the industry. Thus, I told them to focus on this two main distribution channels namely agency as well as bankatakaful. Agency will easily take 3-4 years to show significant result therefore bankatakaful shall be the top agenda in the next 3-5 years. Don't have to crack their heads to find different ways to doing things! The solution is right on the table and ready to be executed.
However, I warned them to be extra cautious when optimizing the existing conventional agency force as it may rock the boat in the conventional business. The takaful leader shall executive with caution all the initiatives required. Clear target market shall be explained in order to avoid crossing the border. Takaful should not at the moment to consider the non-Moslem market as their main target market. Don't be too greedy as there are huge untapped Moslem market waiting ahead. The non-Moslem shall only be a complimentary and accommodation business to the main. Currently, the takaful market penetration in Malaysia is approximately 10% which mainly are Moslem. Thus there are still large number of Moslem who are yet to be insured in takaful business.
Bankatakaful is interesting if all the parties execute correctly. There are two types of bankatakaful which are product bundling and stand alone product. Product bundling is like MRTT, fire and motor takaful policies which are bundled with financing products of the bank. This type of products do not need high investment and efforts. The second type i.e. stand alone takaful product which is specifically designed to suit with the need of the bank's customers. Examples are like retirement, higher education plan, PA, health, etc. These can be part and parcel of the range of products promoted via the bank's sales force or financial consultants.
In conclusion, don't be too amazed with the phrase "do things differently" as it may not necessary deliver the expected results as those initiatives may have yet to be tested.
